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June 20, 2012

Transaction Analysis
Best Buy subsidiary mindSHIFT Technologies to acquire White Glove Technologies

 

Financial Overview

  • The financial terms of the deal were not disclosed 

 

martinwolf Analysis

  • mindSHIFT Technologies, Inc., a managed service provider (MSP) that became a subsidiary of Best Buy Co. Inc. (NYSE:BBY) last November, announced yesterday that it has agreed to acquire White Glove Technologies, LLC, a provider of managed services to small and mid-sized businesses (SMB), for an undisclosed amount.White Glove
  • With this transaction, BBY gains a strong regional market presence in Texas and the Southwest and increases its ability to sell managed services to the SMB marketplace. 
  • While large and mid-market enterprises have always outsourced IT services, recently we have seen smaller businesses do the same.  This has prompted consolidation in a growing market that was recently valued by Gartner at more than $40 billion per year.
  • Both mindSHIFT and White Glove are no strangers to consolidation-since 2008 both companies have been actively acquiring:
    • White Glove has completed five other transactions:
      • Oct. 2009 - Accelerated Digital Solutions, Inc. - IT Services
      • Nov. 2009 - Gravity Technical, Inc. - IT Services
      • Jan. 2010 - Fintan Technologies, LLC. - IT Services
      • Aug. 2010 - Riata Technologies, Inc. - Network Services
      • March 2010 - Primus Networks, Inc. - IT Services
    • mindSHIFT has completed three other transactions
      • Apr 2008 - Collaboration Online, Limited Company - Enterprise-class Exchange hosting
      • Dec 2010 - Alpheon Corporation - Managed Technology Services
      • Feb 2011 - ORBIT Systems, Inc. - Managed Service Provider  
  • This activity highlights the significant opportunity that exists for companies serving the mid-market space as retailers and resellers continue to acquire MSPs to boost their margins. For MSP entrepreneurs, the marketplace provides many favorable conditions for an exit.  
  • martinwolf has direct experience with this trend - we represented Softchoice in their acquisition of UNIS Lumin last year, and we are currently representing three sell-side clients in the space and witnessing active buyer demand.
  • We expect similar large companies, such as Time Warner Cable (TWC) and Verizon to continue this consolidation trend as they expand their business models into the managed services sector for SMB. This continues a trend that we initially observed when BBY acquired mindSHIFT (Nov 2011), TWC acquired Navisite (Feb 2011), Verizon acquired Terremark (Jan 2011), and Konica Minolta acquired All Covered (Jan 2011).
  • The scale-driven nature of the industry and the difficult-to-penetrate SMB market suggests that this consolidation wave will be dominated by larger companies.  
  • We are not only seeing companies outsourcing the managed services component of IT, but they are also increasingly outsourcing a majority of the IT department leveraging cloud technologies as infrastructure as a service (IaaS) continues to expand through technological advancement
Please go here to read the press release.    

 

To learn more about martinwolf contact Matthew Putzulu at  mputzulu@martinwolf.com

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With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

   

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf | M&A Advisors. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

 

September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf advised SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.  

Please click here to view the announcement. 

      

September 20, 2011  

Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. martinwolf advised the seller in this transaction.  

Please click here to read more.  

 

 

martinwolf | M&A Advisors 2012    

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